A North Korean worker seen in 2013 in a factory in the Kaesong Joint Industrial Park, which South Korea ordered closed on Wednesday. (Kim Hong-Ji/Reuters)

South Korea abruptly shut down an industrial complex just over the border in North Korea on Wednesday, cutting off a major source of income for the regime in Pyongyang as punishment for its “extremely provocative” nuclear and rocket tests.

In an unusually harshly worded statement, Seoul flatly accused the North of using money made from inter-Korean projects for its nuclear and missile programs.

About $120 million flowed into North Korea through the Kaesong industrial complex last year alone, the South’s Unification Ministry said. In the 12 years since the complex was established, North Korea had made a total of about $560 million from the site.

“It appears that such funds have not been used to pave the way to peace as the international community had hoped, but rather to upgrade its nuclear weapons and long-range missiles,” the ministry said. As a result, President Park Geun-hye’s government in Seoul said it had “completely shut down” the complex.

The zone, where North Koreans worked in South Korean-owned factories, opened during a period of engagement and and was originally championed as a way to improve the North’s economy — with a long-range goal of minimizing the gap between the countries if they are eventually reunified. The South Korean government and private companies invested about $1 billion in the industrial zone, which had about 124 companies mostly in light manufacturing, such as clothing and electronics. About 54,000 North Koreans were employed there, with the South paying their wages directly to the regime.

A South Korean soldier setting a barricade on the road leading to North Korea's Kaesong joint industrial complex at a military checkpoint in the border city of Paju in 2015. (Jung Yeon-Je/AFP/Getty Images)

But the Unification Ministry statement said the international community needed to come up with a “vigorous response” to a recent nuclear test and rocket launch that “exacts a price for North Korea’s misguided actions, as well as extraordinary measures that compel North Korea to give up its nuclear capabilities and change its ways.”

Separately, Japan on Wednesday announced new unilateral economic sanctions on North Korea in response to the tests, banning North Korean citizens from coming into Japan and North Korean ships from calling at Japanese ports. Transfers of money, except for humanitarian gifts of less than $800, will also be prohibited.

Meanwhile, South Korea’s Yonhap news agency reported Wednesday that the North executed its army chief of staff, Ri Yong Gil, this month for corruption and factional conspiracy. If true, it would be the latest in a series of executions, purges and disappearances under leader Kim Jong Un.

Last month, North Korea carried out its fourth nuclear test, claiming it tested a more powerful hydrogen bomb, but analysts say it was another atomic blast similar to the previous three. On Sunday, the North launched a rocket that, it said, carried a satellite into orbit. The West and allies, however, viewed the launch as another step in developing technology for a ballistic missile program.

The United States, South Korea and Japan were already leading the charge at the United Nations to impose another round of sanctions on North Korea in response to the nuclear test when the rocket was launched.

Immediately after Sunday’s rocket launch, Park’s government said it was opening discussions with the United States on deploying a Terminal High Altitude Area Defense (THAAD) antimissile system in South Korea. Seoul had been cautious about the move for fear of angering Beijing, but the North Korean tests appeared to have spurred Park’s government into action.

The South also increased anti-regime broadcasts into North Korea through loudspeakers lined up along the demilitarized zone that separates the two countries.

Cheong Seong-chang, a North Korea specialist at the Sejong Institute outside Seoul, said that the South Korean government appeared to be making “emotional decisions” when dealing with the North's provocations.

“Opening a discussion with the U.S. about THAAD, which China and Russia are strongly against, means that South Korea’s relations with these two countries will get worse,” Cheong said. “But good relations with China and Russia is vital to work on sanctions on North Korea.”

Plus, it would not have the desired impact because North Korea could just get its workers to produce for Chinese companies, he added.

Companies whose factories were shut down were also unhappy.

“It is unfair and emotional for the government to come to this conclusion without giving the companies any time to minimize possible damages,” said Chung Ki-sup, head of the council of South Korean companies in the Kaesong complex, according to local media reports.

After similar tests in 2013, the South Korean government promised that the Kaesong complex would be allowed to operate separately from politics, he said.

“We urge the government to review today’s decision, ” Chung said.

Aidan Foster-Carter, a Korea analyst based in Britain, called shutting down Kaesong “stupid, short-sighted and inconsistent.”

Soon after Park was elected in 2013, she worked hard to reopen Kaesong after it was closed by the North, and both sides agreed that “the two Koreas will not make Kaesong suffer again,” Foster-Carter said.

“That, too, followed [North Korean] nuclear and missile tests, so why has Park changed her mind, done a U-turn and broken a pledge?” he asked.

Fifield reported from Tokyo.